Mutual Benefit

By Andrew Moody and Zhong Nan | China Daily | Updated: 2012-06-29 12:46

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Although Chinese investment in Africa has increased dramatically in recent years, China began to build a strong relationship with Africa at a time when many of the countries were becoming independent in the late 1950s.

Major early projects included the 1,860-km Tanzania-Zambia railway, completed in 1975 and which was built and funded by the Chinese.

Kojo Amoo-Gottfried, now 78, was Ghana's ambassador to Beijing in the 1990s, and now is president of the Ghana China Friendship Association.

He first visited China in 1959 and says the bond between China and Africa goes beyond merely economic ties.

"We have been colonized and they themselves have been semi-colonized so we have been through similar experiences and it is easy for us to deal with each other on that basis," he says.

The retired diplomat also feels China offers a great role model for Africa in terms of showing what can be achieved with a commitment to develop.

"I can remember when Sanlitun (now the bustling entertainment district in Beijing) was just bush and Shenzhen was a small fishing port and now it is like Hong Kong. There is a feeling if they can do it, we can do it too," he says.

Over tea in the diplomatic residence in Accra bedecked with Chinese artifacts, Gong Jianzhong, China's ambassador to Ghana, says outsiders often misunderstand the China-African relationship because they forget China despite being the world's second-largest economy is also a developing country.

"In GDP per head terms China ranked until recently behind Angola and not far ahead of Ghana. Fifty years ago we faced the same challenges and today we face the same challenges," he says.

"If you go to the countryside in China, you see the same problems that are faced here in Ghana. In both there are issues of healthcare and infrastructure. We both have a strong desire to develop our economies."

Perhaps the biggest way China is assisting Africa is in building infrastructure. The lack of functional roads and unreliable power supply make it very difficult for many businesses to operate at all in many parts of Africa. Both transporting raw materials and finished goods to market is a major headache.

According to a 2010 World Bank report, Africa needed to spend $93 billion on infrastructure every year to sustain future growth. With current spending only around $45 billion, it cannot meet half that target.

Wale Shonibare, chief executive officer of UBA Capital, the investment bank subsidiary of UBA Group, one of the largest banks in Africa based in Nigeria, says Chinese companies are very efficient in building infrastructure.

"The Chinese just say we will come in and build this or that and also provide the funding. There are none of the problems of trying to attract foreign investment into particular projects, which takes a lot of time," he says.

"China spends about 12 percent of its GDP on infrastructure development, whereas a country like Nigeria spends just 3 percent the last time I checked. We need to spend more in order to sustain growth."

China will go and build infrastructure where others fear to tread. Chinese companies were the first into Liberia in 2006 after it had been wracked by civil war for a generation. The country has very limited power and because of the shortage some of the world's highest electricity costs.

Samuel B. Nagbe Jr, assistant minister in the Ministry of Public Works in the capital Monrovia, says Chinese involvement has made a difference.

"Chinese companies are the only actors in terms of infrastructure contracts. This is because they were prepared to take the risk when everyone else didn't feel secure to go there," he says.

Nagbe, however, says this also has drawbacks since there is a lack of competition when large infrastructure projects are offered for tender.

"It would be good for the government if there were more competitors so we could have more choice and as a result you would also have a cost reduction. But for now we don't have it," he says.

One of the charges made against Chinese companies is that they employ only Chinese workers and don't give enough employment opportunities to local people.

But Zhou Yongsheng, general manager of China Communications Construction in Addis Ababa, says it is just not true.

He is currently responsible for the new $612 million expressway in the Ethiopian capital and has been responsible for more road construction in the country than anyone in history.

"Right now we have around 400 Chinese workers and between 7,000 and 8,000 Ethiopian ones," he says.

Arthur Lau is financial controller of Akosombo Textiles, which makes high-quality wax print cloth in Akosombo in the eastern region of Ghana. Privately-owned and part of the Hong Kong-based Cha Group, it employs about 1,300 people, almost all Ghanaians.

"Labor rates are only about 30 percent cheaper here than in China but Chinese workers are two to three times more productive. Self discipline is not a huge concept here," he says.

The overall relationship between China and Africa will remain a subject of debate. Philip Nyinguro, associate professor of political science and international relations at the University of Nairobi, argues the weak state of some African countries makes them vulnerable when they are cutting deals with any country, whether it is China or a Western power.

"The onus has to be on African leaders themselves when they negotiate agreements that they create conditions that benefit themselves. They can't place this responsibility on China," he says.

James Shikwati, director of the Inter Region Economic Network, a leading think tank based in Nairobi, insists it is wrong to describe China as new colonialists in Africa.

He contrasts China to the European powers that carved up the continent in 1885 at a conference in Berlin without any Africans being present.

"The Chinese have brought Africans around the table for discussion. That is the clear difference. You are not going to negotiate with a guy you are going to colonize," he says.

He believes China might actually prove the catalyst in actually helping build the vision the founding fathers of the continent had immediately after independence - a $1 trillion free trade area from Cape Town to Cairo.

"That vision of Africa's leaders at independence got lost in the post Cold War squabbles but has become a reality again with China playing a unifying role," he says.